CFO RESEARCH 2021 - Criticaleye

CFO RESEARCH 2021

LEADING FOR RECOVERY AND GROWTH

Emma CarrollManaging EditorCriticaleye

The year 2020 was one that saw businesses turn to their CFOs for a cool head and resilience as they faced into the storm. We surveyed CFO sentiment in November – the week scientists revealed preliminary analysis showing the Pfizer-BioNTech vaccine had 90% efficacy. While the mood was one of cautious optimism, our results show that CFOs are not taking the recovery for granted.

At the root of this restraint are forecasts – 80% of CFOs estimate it will be a year or more before revenues return to pre-pandemic levels. They are also less confident than their CEOs

in the ability of the senior team to navigate strategic uncertainty and are seeing a greater need to improve Board discussions around performance and governance than in previous years.

When it comes to the CFO’s priorities, cost reduction and organisational design have shot up the list, displacing digital disruption and innovation. However, CFOs recognise that future success continues to depend on their people and, for the fourth year in a row, retaining talent and developing skills remain their top concerns.

A worrying 67% feel isolated in their role, but they are combating this by seeking inspiration from outside the business – CFOs say that bringing in fresh thinking from other sectors is where they most intend to improve over the next 12 months.

Whereas the CFO of 2020 had to provide a steadying pair of hands on the steering wheel, in 2021 they must be ready to switch gears and accelerate into recovery and growth. CFOs are securing cost savings and reshaping their businesses in preparation for these opportunities.

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Findings from Criticaleye’s CFO Research 2021

80% say it will take a year or more for

revenues to recover

CFOs are less confident than CEOs in the senior

team’s ability to navigate strategic uncertainty

Shareholders and investors are the CFO’s

most challenging stakeholders

67% of finance leaders feel isolated in their role

Cost reduction and organisational design

have moved up the priority list

74% of CFOs believe the Chair provides effective

support, compared to just 60% of CEOs

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StrategyCriticaleye offers senior executives a

unique opportunity to discuss and reflect upon strategy with peers and experts

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Does the senior leadership team have the ability to navigate strategic uncertainty?

CFOs are less confident than their CEOs* in the senior team’s ability to navigate strategic uncertainty

“ There have been challenges in managing business as usual versus transformational change.”CFO Research Participant

CEOCFO

10%8%

62%

25%

5%

73%

11%

0%

To a greatextent

To someextent

To a minorextent

Not at all

*All CEO comparatives in this report are taken from our CEO Research 2021

© 2021 Criticaleye All Rights Reserved www.criticaleye.com

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Where are you looking to cancel or suspend planned investment?

Is your business strategy still relevant?

Although most CFOs say their business strategy is still relevant, they hold different views to CEOs on where cuts to investment should be made

To a great extent 46%

To some extent 42%

To a minor extent 8%

Not at all 4%42%

8%

46%

4%

CEOCFO

R&D Property/facilities

Customerengagement

ESG/sustainability

4%10%

88%

62%

0%0% 4%10%

4%

14%

0%4%

Operations Leadershipdevelopment


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What impact will the pandemic have on year-on-year revenues over the next 12 months?

When do you expect your organisation to return to pre-COVID 19 trading levels?

80% of CFOs believe it will take a year or more for trading to recover

4%8%

21%

34%

17%

8% 8%

Decrease of 50% or more

Decrease of 30% to 50%



Less than 10% decrease

No negative impact on

revenue

Our revenue will increase

6 months 4%

9 months 4%

12 months 34%

18 months 12%

2 years 30%

3 years 4%

Our trading levels remain on the same trajectory 12%

30% 4%

12%

34%12%

4%

4%


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Where do you see the biggest changes occurring in your organisation?

CFOs foresee changes right across the organisation, from leaner operating to new customer models

“ The new normal will not become clear for some years.”CFO Research Participant

73%

A leaner operating model 25%

Improved organisational agility 21%

How we engage and connect with customers 21%

Investment in new technology 21%

Hybrid workforce 12%

25%

21%

12%

21%

21%


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Does your Chair add value in terms of supporting the goals and objectives of the executive team?

CFOs say the value added by the Chair has improved over the past two years. CEOs are less positive

2021 2020 2019 2018

74%

26%

64%

36%

36%

64%

77%

23%

Yes

No

60%

40%

Yes

No

CFO

CEO 2021


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In which of the following areas do you need to improve the quality of debate with the Board?

CFOs now say the quality of debate with the Board needs to improve on performance and governance as well as strategy

77%50%

17%33%

6%17%

CEOCFO

Strategy

Performance

Governance

Strategy 50%

Performance 33%

Governance 17%

17%

50%

33%

Strategy 68%

Performance 27%

Governance 5%

27%

5%

68%

Strategy 50%

Performance 33%

Governance 17%

17%

50%

33%

Strategy 68%

Performance 27%

Governance 5%

27%

5%

68%

CFO 2020CFO 2021

CFO vs CEO


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LeadershipCriticaleye enables and develops great

leadership with the perfect mix of peer to peer discussion and high-impact case studies

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As a CFO, do you feel isolated in your role?

67% of finance leaders say they feel isolated in their role (for CEOs this is similar at 62%)


To some extent 55%


Not at all 8%55%

25%

12%8%


To some extent 55%


Not at all 8%55%

25%

12%8%


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Seeking inspiration from other sectors remains the top area where CFOs want to improve, with support for innovation featuring for the first time in three years

Building alignment in the senior leadership team

Seeking inspiration / fresh thinking from other sectors

Supporting innovation

Strategic thinking

People skills and communication

Commercial understanding of the business

123 24 44 -- 55 55 36 66 6

201920202021 2018

31 212 1

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Is business performance enhanced if executives have access to reference points

outside of their organisation / sector?

What have you found to be the most effective leadership development tool for senior executives?

Mentoring and peer-to-peer learning were the most effective leadership development tools, with CFOs agreeing on the value of external reference points

Peer-to-peer learning 30%

Mentoring 26%

Coaching 22%

Partnering with business schools / academics 13%

360-degree feedback 9%

Chair/NEDs 0%

22%

9%

26%

30%13%

To a great extent

To some extent

To a minor extent

Not at all

61%

39%

0%

0%


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CFOs think more should be spent on leadership development than headhunter fees, but say that only 39% of organisations do this

“ It should be a red flag if you spend more on hiring new managers than developing the ones you have.”CFO Research Participant

In your view, should more be spent on leadership development and support for senior

executives, as opposed to headhunters?

In your experience, on which of the following do organisations spend more?

Headhunters / recruitmentfor senior executive roles

Leadership development &support for senior executives

61%

39%

Yes 100%

No 0%

100%


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Cost reduction and organisational design have moved up the priority list for CFOs

Priorities in 2019

CFO Priorities 2021 Priorities in 2020

Priorities in 2018

1.

1.

1.

1.

2.

2.

2.

2.

3.

3.

3.

3.

4.

4.

4.

4.

5.

5.

5.

5.

Retaining key talent and developing skills




Cost reduction

Improved cross-team collaboration

Digital disruption

Digital disruption

Navigating COVID-19

Business model transformation

Innovation

Innovation

Organisational design

Recruiting people with new skills

Business model transformation

Improved performance management



Cost reduction

Recruiting people with new skills

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StakeholdersCriticaleye provides the right reference points to manage and

navigate increasingly important stakeholder relationships

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Who is your most challenging internal stakeholder?

Who is your most challenging external stakeholder?

Shareholders and investors will be a major focus for CFOs in 2021, while internally the senior leadership team is most challenging

Shareholders/ investors 41%

Customers 25%

Regulator/s 17%

Government 13%

Suppliers 4%

17%

4%

25%

41%

13%

Chair 8%

Board 25%

Workforce 25%

Senior leadership team 42%

25%

42% 25%

8%


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NEDS HRDsCEOsCommercial understanding of the business

Strategic thinkingBuilding alignment in the senior leadership team

Ability to challenge constructively

Commercial understanding of the business

Seeking inspiration / fresh thinking from other sectors

Strategic thinkingSeeking inspiration / fresh thinking from other sectors

Supporting innovation

1. 1.1.

2. 2.2.

3. 3.3.

CFOs revealed the top three areas of improvement for their colleagues

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EPISODE 1In this first podcast within

our Leadership in Uncertain Times series, Criticaleye’s

CEO Matthew Blagg and Director of Content Marc Barber discuss how

leadership teams are responding to the events of 2020 and planning for

the future (July 2020).

EPISODE 2Over 38 minutes, this

podcast covers the forward agenda for CEOs

and senior executives, operating model change, the future of the office,

understanding the customer experience, management team performance, and

the challenge of balancing economic pressure with COVID-19’s impact on health and wellbeing (September 2020).

EPISODE 3“Experience is what you get when you don’t get

what you want, and there are a lot of leaders getting a lot of experience at the

moment.” Listen in as our CEO Matthew Blagg and Director of Content

Marc Barber reflect upon discussions and insights from our CEO Retreat 2020 (October 2020).

EPISODE 4Reflecting on our 2020

Virtual CFO Retreat, in this podcast, Criticaleye covers

how finance leaders can remain resilient, the balance

between cost-cutting and investment, data, talent,

digitisation and much more. The role of the CFO has

never been more crucial in a complex and fast-changing market. (November 2020).

EPISODE 5This podcast follows our Virtual Asia Leadership

Retreat 2020. Criticaleye CEO Matthew Blagg and Director of Content Marc Barber discuss questions

for leaders around purpose and the people agenda.

We explore what changes are likely within leadership teams in the year ahead, and how the pandemic has impacted consumer

behaviour. (December 2020).

To listen in to any of Criticaleye’s podcasts, please visit: www.podcasts.criticaleye.com

LEADERSHIP IN UNCERTAIN TIMESCRITICALEYE PODCASTS

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https://podcasts.criticaleye.com/


“ At Criticaleye we believe that great leadership creates positive outcomes and enables powerful legacies. Whatever the strategic direction of your business, it’s essential to have an effective, cohesive leadership team in which there is complete trust and alignment.”

Charlie WagstaffManaging Director, Criticaleye

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Our unique strength lies in our ability to bring together a wide range of leadership and industry experience.

We invite leaders into a trusted environment, where executives and their teams get access to the insight they need to enhance their performance.

We enable senior executives to address key questions around leadership, strategy and stakeholder management.

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challenged to reach the best outcome

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CFO RESEARCH 2021 - Criticaleye

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